Bank of England Holds Rates at 4.00% for Second Consecutive Meeting: The Autumn Pause
On 6 November 2025, the Bank of England's Monetary Policy Committee (MPC) voted to hold the base rate at 4.00% for the second consecutive meeting, following its earlier decision to pause in September. While the hold itself was not unexpected, the narrowing margin of the vote has caught the attention of economists and mortgage watchers alike, suggesting that further rate cuts could be just around the corner.
A Tale of Two Votes
When the MPC opted to hold rates in September, the decision was relatively comfortable, with a 7-2 split in favour of keeping the base rate unchanged. At that stage, the committee appeared broadly united in the view that the August cut from 4.50% to 4.00% needed time to work its way through the economy before any further action was warranted.
By November, however, the picture had shifted markedly. The vote narrowed to a tight 5-4 split, with four members of the committee voting in favour of a further reduction. This near-miss signals a growing appetite within the MPC for additional monetary easing and has fuelled widespread speculation that a rate cut could arrive as early as December.
Inflation Complicates the Picture
One of the key reasons the MPC held firm was the persistence of above-target inflation. The Consumer Price Index (CPI) rose to 3.8% in September before easing slightly to 3.6% in October. Both readings remain well above the Bank's 2% target, and several committee members expressed concern that cutting rates prematurely could risk embedding inflationary pressures in the economy.
However, the inflation data told only part of the story. The labour market had been weakening steadily throughout the autumn, with unemployment edging upward and wage growth beginning to moderate. GDP growth, meanwhile, remained sluggish, with the economy expanding at a pace well below its long-term trend. For the four dissenting MPC members, these indicators suggested that the balance of risks had tilted sufficiently to justify another cut.
What the Autumn Pause Means for Mortgage Holders
For homeowners on tracker and variable rate mortgages, the consecutive holds meant that monthly repayments remained unchanged from the levels set after the August cut. Those on deals linked directly to the base rate continued to benefit from the 0.50 percentage point reduction delivered earlier in the summer, but received no additional relief in the autumn.
The picture for fixed rate borrowers was more nuanced. Despite the pause in base rate cuts, fixed rate mortgage pricing remained broadly competitive throughout September and October. Lenders continued to price their products based on expectations of future rate reductions, and swap rates, which underpin fixed rate mortgage pricing, reflected the market's belief that the base rate would fall further in 2026.
For borrowers coming off existing fixed rate deals, the market offered materially better rates than had been available a year earlier. Those whose two-year or five-year fixes were expiring found they could secure new deals at rates significantly lower than the peaks seen in late 2023 and early 2024, making remortgaging an attractive proposition for many households.
Lender Response: Fine-Tuning and Price Wars
The autumn pause gave lenders an opportunity to fine-tune their mortgage pricing in a competitive environment. In October, some lenders nudged rates slightly higher as swap rates fluctuated in response to mixed economic data and global uncertainty. However, by November, the direction of travel reversed, with many major lenders cutting their headline rates in anticipation of a December base rate reduction.
The result was a developing "price war" among high street banks and building societies, each vying for market share. Several of the UK's largest lenders launched eye-catching deals aimed at remortgaging customers and first-time buyers, with some five-year fixed rates dropping below levels seen earlier in the year. Brokers reported a surge in activity as borrowers moved to lock in favourable terms ahead of anticipated year-end demand.
Looking Ahead
The tight 5-4 November vote has set the stage for a potentially pivotal December meeting. If inflation continues to ease and labour market data remains soft, the case for a further cut will be difficult for the MPC to resist. Mortgage borrowers and prospective buyers would be well advised to keep a close eye on upcoming economic data releases, as the next few weeks could prove decisive for the direction of UK interest rates heading into 2026.